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tv   Closing Bell With Maria Bartiromo  CNBC  August 14, 2013 4:00pm-5:01pm EDT

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>> i'm not. but i think a lot of people are. there's a lot of money ready to catch up in the market. >> all right. thank you, matt, very much. [ bell sounds ] that will do it for the first half of the "closing bell." apple doesn't look like it will close above $500. cisco earnings will set the tone for tomorrow. stay tuned for the second hour of the "closing bell" with maria bartiromo. i'll see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. red arrows on wall street. the dow closing lower for the ninth time in the last 13 trading sessions. look at how we're settling out on the street. the dow down 113 points, .75%. at 15,337. volume on the light side once again today. nasdaq down about 15 points, almost about .50%, to 3,669. and the s&p 500 gives up 9. we have a big hour ahead. bob pisani, nathan and peter are ready to break down the day on wall street.
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plus cisco earnings due out any moment. jon fortt, eric, mark having instant analysis of the numbers and the expectations call for 51 cents of share on revenue of $12 billion. we want to kick off with bob and today's pullback. >> reporter: depressingly similar pattern again today, maria. opening, and markets just move down. more times than not since august, putting up the dow, that's what's happened. sometime in the midday, sometimes, we've had a rally to move to the upside. but not today. basically ending not too far from the lows of the day. has the market lost its bid? put up the full screen. higher rates clearly a bit of an issue and clearly a bit of a problem overall. however, i would point out that the u.s. has seen stock weakness while we have seen strength in europe as well as strength in emerging markets. look at the global markets for the month of august. u.s. has usually been a leader for the several month, but now is a laggard. brazil, germany, china, all notably outperforming the u.s. emerging markets have had a terrible first half of the year.
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china's strength is sucking in some commodity stocks. they have been big performers on the plus side this month. so steel and coal and copper stocks -- these are exchange-traded funds -- all have been to the upside. what are higher rates doing to the stock market? they're killing the homebuilders. taylor more son recently went public, had the earnings out. orders below expectations. they're a high-end builder. they said higher rates didn't hurt them. but the orders were not as strong as they thought. you can see that stock is down 8%. taken all of the builders with it. the etf for homebuilders is at a low for the year. this is a loss-momentum group. department stores, a tough day. macy's came out. sales were well below expectations. the analysts got this one wrong, again. i think a little bit of laziness on the part of some of the analysts. they should have better models. a real disappointment. it dragged down most of the department stores. maria, volume has been painfully low, as you noted today. there's very little economic or emotional involvement in the markets. and they have a phrase for this -- it's called august.
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i'd be careful about making a lot of dramatic pronouncements based on the painfully low volume we've been seeing recently. back to you. >> yeah, i agree, bob. thank you so much. joining me now to talk more about the markets and investing is nathan and peter. gentlemen, good to see you. do you agree, we should ignore the volume numbers? it doesn't necessarily indicate a lack of participation, but really just a lack of overall participation because of the summertime? nathan? >> no, i don't think it has anything to do with volumes right now. i think we're suffering from taper-alisis. we've been told we'll get taper. two out of three economists says we'll have a taper in september. and then the producer prices come out. today, what we have is a difference of opinion. the bond market hardly budged. they want 2.7 on a 10-year treasury and the stock market said, wow, we may not be able to raise our prices, and we could have deflation. the fed doesn't have a solution for that. so i think we had a very big difference of opinion. i'd like to see us do taper or
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not do it, but talking about it seems to be doing nothing good for stocks. >> peter, when do you expect the tapering to begin? >> well, i think what's going to happen is as we approach september, we are going to have more intense focus on this discussion, maria. much more than we've had, say, this month. and this will be a buying opportunity. i could see the dow trading anywhere down 100 to 300, 350 points. during that time, that volatility -- which i would call benign volatility, because that's going to happen -- that's the time to jump in and buy your favorite stocks. i do think the fed will probably start to take the foot off the gas at the end of september. even if they don't, they will be such discussion, such focus on this, it will be the top priority of every analyst and portfolio manager out there. that's the time to take advantage of it. >> so what would you be doing now then, knowing that the market has been trading down? we're at about one-month lows. how do you want to be positioned, peter? >> well, we have our clients positioned just the same as we
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were about a month ago, and what i'm saying is, as september approaches, we are going to see more dips. buy your favorite stocks. get in to risky assets at that point. because, maria, we also have to focus on the fact that higher interest rates -- i know many have said this, but i think it bears infinite repeating -- higher interest rates will be a sign that the economy is picking up. two-thirds of the economists out there right now are saying that the fed is going to taper. well, logic dictates, then, that two-thirds of the economists out there are saying that the economy is going to pick up. so that's all very positive. i do not -- >> -- applications are around 50% from april, though, maria. >> go ahead, nathan. >> mortgage applications are off 50% from april. so somebody is noticing interest rates. >> -- improving all that much? >> that's right. >> well, what -- >> the rate also have an effect, without a question. >> -- that that doesn't really impact, i would say, the general earnings of companies.
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what i'm talking about are stocks. companies -- >> right. >> -- i know they're driven by the consumer, many of them, but still there are companies, even this month, on light volume. you've seen many companies trade up in double digits. that's because their earnings have been very strong. their outlooks have been adjusted upward. and that's factoring in a pro forma tightening by the fed. >> i'm glad you mentioned earnings, because cisco is out. we want to get to jon fortt to go through the numbers. jon, what else can you tell us? >> reporter: the numbers look solid, maria. revenue came in at $12.4 billion, what about what the street was looking for. net income at $2.8 billion which, again, is about in line. looking for cash. let me give you a little insight into dividends and stock repurchase. cisco paid cash dividend of 17 cents per common share, about what you'd expect. repurchased 47 million shares of
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common stock. last quarter, they repurchased 41 million shares of common stock. we're going to have to wait for the call to get a lot more detail on guidance. but at this point, the numbers seem pretty much in line. i also want to get the gross margin number out of here for you. >> all right. we want to get to some analysis on this, and join eric from jmp securities and mark. good to see you both. eric, your reaction to the numbers? >> well, i was hoping that we would see some better upside. cisco was pretty upbeat on their last release, and we've seen good indicators from a number of other vendors. so i was hoping we would see a little better upside on the revenue. the company's done well from a margins perspective for a while. so i'm not too surprised on that. but in general, i was a little bit more upbeat than what he had just mentioned. >> and you've got a hold rating,
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correct? >> that's correct. >> mark, what's your take on the numbers? >> i think if you look at the details, and i think the margins will be key, it shows the company is much different than it was even just a year ago. they've actually quickened their decision-making process, they've improved the sales execution, and they've also heightened their ability to gain market share. so i think it all looks pretty good so far. i think on the call, the view is that the blue bill, a key indicator, will be above one, and they saved a lot going into their conservative seasonally slow october quarter. so i think the results are pretty good, maria. >> so the results are pretty good from your standpoint. cisco became the 24th most shorted stock in the dow. you have an outperform rating. why do you think there's so much negativity around it? >> i think if we look at it from the stock point of view, it's had a really hard bounce from $20 all the way up to here to $26, maria. so i think people are thinking,
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what's the next step function that will drive the stock higher? and i think a lot of that will be accelerating top-line growth and improving margins. in our view, it will be a steady progress towards a stock that will appreciate from here on forward. but the big move has been made already, so i think some are betting against that. but i think the view is that the execution is improving. it is a much better company than it was a year ago. >> and, eric, from your standpoint, the biggest headwinds facing cisco right now, what are you expecting to hear on the call? >> well, the key for cisco is how effect everly they can transition -- effectively they can transition the company. the goal is to become the number one i.p. company and they want to expand in adjacent markets. i think the key element for investors is how effectively they've been able to expand some of the product lines that they've been -- they've entered into in the last couple of years. things like data center networking and collaboration and service provider video. things like that. it needs to be a key driver in
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terms of generating the growth that mark had referenced there. >> so in terms of -- in terms of margins, do you think that the margins have disappointed here, or are you pleased with what you're hearing? >> in terms of the margins, directionally they've been moving in the right way. i think, however, investors -- there are some that want to see -- that want to see sharper rates of improvement in both gross margins and operating margins. some of that is mixed, which they will articulate on the call. and some of that is just something they're seeing rapid growth in the data center business. but overall, we do think if you think over the next 12 months, the margins will directionally move higher. and we did a survey with investors, maria, saying what's the most important thing that will be the driver for the stock going forward? it's less about the top line. it's all about margins. >> and what about -- what about the dividends, eric, in terms of new money to work, paying back shareholders here? >> well, i think that the stock is pretty well reflected the
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increase in dividend from -- that they did last quarter when they went to 17 cents. and they just made a fairly large acquisition in cash of a security company, sourcefire. i would be surprised if we have much opportunity for them to take up the dividend from here anytime in the relatively near future. >> all right. we will leave it there. gentlemen, thank you very much. the stock down about 3% right here. >> thank you. >> we'll keep watching it. we appreciate it. more on today's market action coming up after the break. it was the tweet heard 'round the world. why the world wide web, billionaire investor bill icahn's tweet about apple yesterday sent the stock soaring, his investment soaring into the tens of millions of dollars. is tweeting the way of the future? how dangerous is it for the free and fair market? and adam richman has a new restaurant called fandemonium. that and a lot more coming up on "closing bell."
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equipment, reporting quarterly profits that beat solid sales of tractors, harvesters, but some analysts, including those at william blair, think third quarter results mark the peak here. expect farmers to cut capital spending. also macy's posted quarterly sales and profit that missed. what analysts wanted to see, by the way, the first time the retailer has missed on the earnings since 2007. mariotte, also moving higher, late in the day. dow jones reporting it was close to a deal to sell three hotels to abu dhabi investment authority for 800 million. and now view for house hold, debuted on the nyc, priced at 23 per share. finally, apple keeps trucking higher. yesterday, of course, carl icahn revealing he had a large stake in the company. we learned today that leon cooperman's omega advisors also took a stake in apple. last quarter. not everyone, though, is an apple fan, though. in 13-f, we heard julia
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robertson's tiger management cut its stake in the company. maria, back to you. >> all right, josh, thank you very much. the tweet heard around the global markets yesterday was from carl icahn. taking to twitter to say he has taken a big position in apple. the stock started its climb higher and continued that climb today. as you can see, $498.50. it did cross 500 earlier today, but closed below that. the securities and exchange commission says it is okay to use social media for disclosing material information, but does this type of hyped disclosure take it too far? ron insana says it's opening a pandora's box and could lead to market manipulation, but dave says it's the new reality of 2013. they join me now along with peter costa of empire executions to get on-the-ground perspective. peter, i want to kick it off with you before i talk to the pros and cons about this. do you look at tweets in terms of -- in terms of your clients? do you focus and put importance
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into tweets depending on what it is? >> maria, i'm going to say, you know what, i might be old school, and that is why i don't look at tweets. and one of the things i think we'll probably discuss that, i think it is opening a pandora's box. understanding that new media is very important as far as getting information out, but i don't think the individual or the private investor is really being served properly with that kind of information. i think that that's more -- you know, something like that yesterday, you look at the trading in it, that stock rallied very quickly after carl made that tweet, and there's no way humans could have reacted that quickly to it, unless they're following carl icahn's tweet, and that's it. >> right. >> so there's algorithmic programs that search for the key words that will send a stock moving, and that's exactly what happened in that stock. no individual investor really -- i mean, benefited from that. >> ron, what's the pandora's box that's opening that you want to talk about? >> well, maria, we have the activist trend now that in some
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ways reminiscent of the corporate raiding trend of the 1980s, and it included carl icahn and a host of others, irwin jacob, not the ceo of qualcomm, a different gentleman, all of the guys out there trying to force companies to either get rid of the cash, part with certain businesses or recapitalize. they did it to have leveraged fashion in those days. now you have corporate raiders coming after company-cash-rich companies. in the '80s, they would whisper in our ear, not a turf thing, and the reporter would tell you what he told you if he was an activist, find out whether or not the statements that were material and made to you made sense. now they can go straight to the investing public without an intermediary having to figure out whether or not they're just doing this to push the stock, they've got -- you know, at the can pump and dump if they want to, although it's illegal, but there's the possibility of that kind of risk where investors can get taken for a ride with no in-between, no buffer in between, you know, the person who puts out that type of information and the person on the other side of the trade. >> all right.
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dave, you say this is -- this is the new reality. explain. >> well, it's not only the reality, i think it's a huge net benefit to investors. i mean, listen to what ron's saying. ron's saying, well, if we in the media aren't here to stand in between, then it can't be good enough information. this is about rapid flows of information. i mean, this is publishing, right? >> no, it's not. >> the tweet button is a publishing mechanism. >> it depends on intent. >> if you look at his tweet, all he said, we've taken a large position and we think the company is undervalued. is somebody at cnbc going to check that out and say, no, it's not. >> absolutely. well, certainly, we would. you know, pardon me for using this eck precious, but in the old days, you had to check on the 13-d filings to see if a company had a material -- >> how is a tweet different fundamentally from icahn, from icahn enterprises, where he said he'll talk officially, how is that different from any filing with the s.e.c.? >> how do you know he's not selling it as soon as he's putting that tweet out? in fact -- >> you don't know that with any
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investor. i mean, it's all about -- >> so are you saying there should be legislation around tweeting, or -- >> no, i didn't say that. >> no, but i thought that if you are an investment manager, you're not supposed to be out there tweeting. i mean, as i understood it, if you are -- i mean, certainly for a public company ceo, but i guess it doesn't apply if you are running money, if you're in charge of assets. >> i don't think it should. i don't think anybody should be talking their book and tweeting at the same time. that sets up a dangerous scenario in which -- >> how is that different than -- than anybody -- >> can i -- >> -- coming on cnbc and talking about what they're managing? >> -- ask questions and probe a little bit more deeply than just everybody taking things at face value. sorry, peter. >> no, i just want to tell you something, that as far as the s.e.c. approving what happened yesterday, i think once they look into it a little further, it won't be an acceptable practice. you know what, if you're advertising a position through an advertising medium, which twitter can be considered that, that's illegal.
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there are certain restrictions on what you can say to potential investors -- >> that's what i thought. >> -- there's a lot of things that -- [ overlapping speakers ] >> -- those are artificial distinctions that don't exist. >> what needs to happen, it needs to be -- we need to know what the distinction is. you think it's an artificial distinction. to me, that's an advertising medium. how many people go on twitter and advertise what they're doing? it's an advertising medium. >> i believe -- >> it is. it's absolutely -- >> -- money managers that come on anybody's business show are advertising two things. number one, this is what i own, and i think you should buy it, because i think it will go up, and i want people who already own it, that i manage, to go up. and number two, look how smart and competent i am. both very good -- both very good ends. but everybody's got an agenda. and the idea that somehow the media -- the traditional media is beyond that, it's -- that's laughable. >> it's not laughable. let me say why. i mean, we had -- and there was one manager who had come on one of my shows several years ago
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and had made some material statements about something. i probed very deeply into what he had to say. it turned out he got into -- you know, then the wa"wall street journal" picked up and followed the positions in the company he had talked about, what he was doing with them, whether or not he was selling them while he was talking to us. and it happened on a number of different occasions. traditional media, as much as you want to disparage it, we have the obligation to follow up. >> i'm not disparaging it, ron. what stops any reporter from following up on -- >> well, that's the statement -- [ overlapping speakers ] >> -- as opposed to react. >> i'm not questioning the audience of twitter, because it's enormous. is there a broad enough investor class so that everybody's getting the same information at the same time? and i think at the end of the day, that's what you're talking about, ron. that you -- we need a -- a level playing field. >> i'm actually more worried about how individuals may manipulate twitter with just, you know, throwing the shots out there. >> exactly. >> you know, whether or not their stake is material, whether
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it's very small, but they're driving the stock up, whether or not -- >> so, ron, how far should we go back? should we go back to the days of button-wood accord where we're meeting under the -- >> that would be may of 1792. no, by the way, there was media covering that particular period, it just wasn't live and 24/7. >> this whole situation is ripe for abuse. >> yeah. >> and that's one of the things that the s.e.c. has to look into, because there are going to be opportunities for abuse of this system. and no matter what you say, anytime -- you know what? obama shot, or whatever happens, i think it was a few months ago, the market went down 145 points. >> right. >> it was an explosion in the white house. yeah, it was -- >> an explosion in the white house. >> an erroneous tweet that was -- >> the more intermediaries there are, the more chance the information gets perverted. >> you'll trust your investment decision somebody who's on twitter. that american may not be who they say they are. you're going to believe that? >> that's not true. >> you don't know.
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>> that's not true. he has a verified address. you know it's carl icahn. >> yeah, but -- well, i don't know you can defend all the time that you know the person who says they are is who they are. i think we all know that there's enough -- >> you're verified, maria. >> what? >> maria -- >> you're verified. i think there are three maria bartiromos on facebook. give me a break. >> ron insana is not -- mine's r. insana. >> i can't use some guys says he is. i have to use a different one. >> maria, let me make one other point. >> all right. final point right here. >> the whole activist thing going on now where carl icahn's demanding apple pay out maybe $150 billion in cash and buy back stocks, you know, buy back stock, this is a version of the 1980s game played that will ultimately be deleterious against the corporations. and the guys know the public
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pressure on a company, it's in the form of green mail, and a new package, and this is an additional risk the market may face. >> that has nothing to do with twitter. >> i was making a separate point, yes, i know that. thank you for clearing that up. >> it's really a rich subject to continue to discussing. we will. we'll see you soon, gentlemen. thank you. up next, diamonds and dogs. two different passions, two different kinds of investments. coming up, diamond dealer to the uber rich, graff holding ceo will be with me, telling how the market for precious jewels is holding up. find out which country is hungry for the latest bling. and zoetis jumping 15% since the spinoff. we'll talk to the ceo about how he plans to keep the upward momentum kicking. and find out why this truck is parked outside the new york stock exchange today. back in a moment. ant is giving me a sales pitch, especially when it comes to my investments. you want a broker you can trust.
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but his accident took that away. thankfully, he's got aflac. they're gonna give him cash to help pay his bills so he can just focus on getting better. we're taking it one day at a time. one day at a time. [ male announcer ] see how the duck's lessons are going at welcome back. more than $53 billion is spent on household pets in the u.s. each year. zoetis is at the forefront of keeping the pets and lots of other animals around the world healthy. it became one of the largest ipos since facebook when pfizer spun off the company in early february. and this afternoon, the company highlighted its partnership with the smithsonian and their traveling exhibit, as the ceo rang the closing bell, juan remoan is with me, right now, to talk more about it. good to have you on the program. good to see you. thank you for joining us. >> thank you, maria. >> you rang the closing bell.
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i'll ask about the traveling exhibit in a moment. the business of spending money on our pets totally boggles the mind. it's continuing to grow. >> continuing to grow. the bonds between humans and animals are growing every day. it's not only growing in developed markets but also emerging markets. the middle class in these countries are growing, adopting more pets and also spending more in making sure the pets are healthy. >> is that where the growth of zoetis comes from, the emerging markets? is that the big growth potential beyond the u.s.? >> definitely we have opportunities involved. developed and emerging markets. and in both, we have companion needs but also livestock. the 60% of the animal health industry is farm animals. 40% is companion animals. and in both type of countries, the growth is very positive. >> really interesting. so you have the traveling exhibit with the smithsonian called animal connection, our
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journey together. tell us about it. >> it's a great collaboration. we thank smithsonian, but we've also the american veterinarian medical association, that together we created this truck which is a truck that will be moving around cities in the u.s., showing the connection between animals and the human. and again, so it's not only companion animals but also livestock, and also wild animals, and the connection we have with those animals. >> and the truck is outside the new york stock exchange. pfizer spun off the company in february. the stock has been very well, post-ipo, up about 16%. tell me how life has been as a separate independent company away from pfizer. >> it's been great. >> yeah? >> we are very pleased with our performance. so we just reported second quarter. we show growth in revenues. also, we showed that our eps is
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3 cents and delivering the results at the same time we've been managing the complexity of being outside of pfizer, and also continue to deliver integration. >> how big is the pet and animal health business? what kind of an expected growth are you looking for? >> well, the animal health industry is expecting that in the next five years, the animal health industry will be growing between 5% to 7%, and this will be equally in companion animal and also livestock. so these are the expected growth in the animal health industry. >> so in terms of your growth, zoetis' growth, what can investors expect in the coming three years, for example in. >> we have all of the characteristics and capabilities to really deliver a growth in line or slightly ahead of the market. so this is something we are confident because of our business model, our direct interaction with customers, our innovation, and also the quality of our manufacturing will be really able to deliver the market growth. >> very interesting.
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and i know a number of diseases, like swine and bird flu, mad cow disease, have threatened livestock, and you are working on that. good to have you on the program, sir. thank you very much. >> thank you very much, maria. >> we appreciate it. as an animal lover myself and as a dog lover, i'm sending you my best. and good to see you. thank you very much, sir. >> thank you. >> we'll take a short break. if jcpenney could find a market for bad luck, they might be a very profitable company. after a week of board room brawls that has battered the brand, the department store chain takes a hit from consumers with parents accusing of jcpenney promoting bullying in the new back-to-school ad. that story is next. and our special series that goes behind the reality television business. first, crazy over food. now he's looking for crazy people. adam richman is traveling the country looking for the zell otts of pop culture. the real deals of realities, next. stay with us. before global opportunities were part of their investment strategy... before they funded scholarships to the schools that gave them scholarships... before they planned for their parents' future needs
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welcome back. five years on television could translate into 30 in prison? theresa and joe guides, two stars of "real housewives of new jersey" were before the judge a little while ago. the judge said both are denying the charges and entering a not guilty plea on the 39 counts of fraud. now, the courthouse was a storm of paparazzi and reality television fans.
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much as it was last month when the duo were charged. they remain free on $500,000 bail. the next hearing is slated for october 3rd, and barring any motions for delay, the trial will begin october 8th. we'll be watching. from a reality horror story to a success story, my next guest is known to frequent a restaurant or two across america. and when he does, business more than doubles for those eateries. he's adam richman, the star of "fandemonium" and many know him as the host and combatant of "man versus food." adam joins the ranking of the reality roster making differences in the small business community across america. good to see you, adam. thank you for joining us. >> thank you, maria. >> you've changed the course of many restaurants across america. what's the biggest challenge facing restaurants today? >> you know, i think that a lot of the restaurant market is just glutted. there's so very many restaurants, so many restaurant concepts, everyone is trying to, you know, be part of the next
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trend and the next phase. and it really seems to be that the ones that succeed are the ones that don't really go with the trend. they sort of do a few things really well, and they do those for perpetuity. i also think that, you know, now we have people ordering in more, applications like seamless is making that even more easy. so people aren't frequenting brick-and-mortar restaurants the same way they used to. and now, people are also more educated eaters, looking for things like free range, organic, and so on, which is a higher price point for many smaller restaurant businesses. >> so what does it take to be successful in the restaurant business today? you know, it's pretty extraordinary when you see the number of restaurants out there. can they all do well? >> i mean, i -- of course, being a veteran of the restaurant industry, i personally wish them all vast, vast success. i do not -- i don't think they can all do well. i think that there's just a lot of competition. if it's an ethnic-based cuisine, everyone is going to say, which is more authentic, and a lot of
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times there's regional variances as there is in mexican cuisine, for example, or italian, northern/southern. and, also, by virtue of the fact that in certain cities, certain neighborhoods are more advantageous for certain restaurants, and they get full. and quite simply, if you're not in the right place at the right time, your business can fail. i think that's actually one of the biggest feathers in the cap of the food-truck industry. >> well, it's also -- you know, you go into a restaurant, creates so much hype and euphoria around it, you could also say social media is helpful. if you don't have things like this, it's going to be very tough to actually get your name out there. >> absolutely. you could tell who's really the savvy restauranteurs, the ones that will have a twitter acco t account. you know, there's an empanada place that puts their specials on vine and the way they make them. you have to be au currant, and
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even if it's home style meat loaf and mashed potatoes, it's a way to get it out there, to create the korean tacos and all of the things popping up over the culinary landscape now. >> what about the reality television business, a $12 billion business. how do you stay successful in reality tv? it's extraordinary when you look at 9 growth in that business, huh? >> absolutely. a lot of it is just staying ahead of the curve. you know, for myself, people thought that i transitioned from "man versus food" to "man versus food-nation" because of me having health problems, but quite frankly, my feeling is, if you wait for your audience to tell you they want to see something new, you have waited too long. you have to anticipate the change. i think in the reality business, it's not a matter of sort of reinvention a la madonna, but a matter of finding something new that's vital and connects with the audience, that isn't about you.
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>> all right. we'll leave it there. adam, good to talk with you. thank you so much. >> thank you so much. >> we'll see you soon. >> yes, ma'am. more to come in our special series in the business of and the business behind reality television. tomorrow, john tap for the host of "bar rescue" joins us. he'll talk about the secret to success after rescuing 800 bars across the country. up next, what could turn stocks around tomorrow? we had a tough day today. up next, the wall street money pros could chime in on what could be moving your money big time tomorrow. stay with us. then, graff holding ceo on the fight involving the luxury diamond dealer and woody allen's latest film "blue jasmine." wait until you hear what the controversy is all about. we'll talk diamonds next. [ male announcer ] come to the lexus
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all right. the focus tomorrow on the markets and whether the stocks can get into the plus column. 30 seconds on the clock for each of the next guests and they're here to tell us what we should watch for tomorrow. i'm joined by sahak, and jay, and good to see you both. sahak, you're up first. what do you want to prepare for for tomorrow? >> thank you, maria. two economic data points we'll be watching tomorrow morning. first the initial jobless claims now at multiyear lows and secondly the housing market index, which will provide a gauge to economic momentum. within the broader markets,
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we've noticed -- within -- pardon me, within the broader markets, we've noticed breadth decline and price has been confirming of the move. one stock we'd like to highlight is medtronic, mutual rated, with possible fundamental headwinds on the horizon. and recently, the technical bearish divergence, we think some profits should be taken at current levels. [ bell sounds ] >> jay, you're up. what are you keeping your eye on? >> well, i'm watching the fed's release of the industrial production and capacity utilization index at 915. industrial production has been trending down for about the last 18 months. and it's been very volatile for the last three months. this is about 20% of gdp, the components in that index. and it's also about 50% at times of the quarterly variation in that index. so when you watch that index, and that index is doing well, then we've got a good handle on gdp for the quarter, especially for the third quarter. >> mm, okay. so we'll be watching that.
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good to have you both. thank you so much, gentlemen. we'll see you soon. >> thank you. >> we'll be watching. >> thank you. woody allen's films have been seen as hollywood gems, but now a precious gem business mentioned in his latest film, "blue jasmine," has the head of graff holding seeing red. the head of the company that supplies jewels to the uber rich explains what the fuss is about coming up. but one-time retail jeweller jcpenney continues to lose luster after a week of board room brawls. they're now accused of promoting bullying. our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.
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welcome back. jcpenney coming up under attack for a back-to-school ad. critics say it promote s bullying. courtney reagan, what's going on? >> reporter: it's not the attention any retailer wants or needs right now. bun of the ads from jcpenney is upsetting some parents. it shows arizona jeans animated on a gym floor, flashes of sneakers, and then this. >> it can make or break your entire year. i won't even pretend to know what cool is. >> reporter: that's the portion of the ad that's upset some consumers posting on jcpenney's facebook page, one accusing jcpenney of promoting clique-ishness and ostracism, saying jcpenney should be the
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only one sitting at the lunch table. another says school is distressing enough without jcpenney telling them without they're wearing is the most important thing. a third shopper says the ad isn't allowed to play at home, warning jcpenney it won't be getting a penny from the family of six. jcpenney tells cnbc, our intent was not to trivialize or promote bullying. at jcpenney, we're committed to carrying a broad range of styles that lets kids express their individuality and make a positive first impression. the company also says the ad is part of a handful of television ads, and this one in particular aired earlier in the summer. i have seen it and it ran as scheduled. it's no longer part of the tv campaign. it's making way for new ads. whether you see the ad the same way as some parents do, it's safe to assume it's not smart to scare people into buying your merchandise, if that was the point of the ad. maria. >> all right. thank you so much. woody allen's new flick has gotten stellar reviews from critics.
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not everybody is pleased with the film. one high-end jeweller is not happy with one scene involving cate blanchett's character. the movie studio would not provide us that clip, but this is what she says after falling on hard times as the wife of a bernie madoff type character. okay, here, we are quoting. mad type character. you know, i sold what jewels and furs i could hide from uncle sam. oh, god, i'd hate to tell you about that rude awakening, that your jewelry is to priceless when you buy it until you're desperate for money, forced to sell, then it seems you cannot give it away. the ceo is with me right now. we did call woody allen, but he declined to comment. great to have you. i want to talk a lot about what's going on in your business, but first, let's talk about this movie. you took issue with the fact your company's name was
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mentioned of a decline in value of jewelry. >> look, the movie is great and i have great admiration for woodlwoo woody allen. it fits the story with reality. we put it behind u us and it's us and it's actually fun to be quoted in the movie, however, we've got to set the record straight because she can't be further from the truth. >> let's do that. you and i have talked in the past, a diamond you bought 20 years ago is probably more valuable. tell me the valuation of jewels? >> the value continues to go up, for the past ten years, until 2020 at least, the demand is growing twice faster than the offer. so, that gap is growing tremendously, which means that the price of real high quality fine diamonds in the past seven years for example has gone up on
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average 650%, so a diamond 20 years ago is worth much, much more and is going to continue to do so for the next 10, 15 years. >> this is an interesting point because when you're dealing in very high-end, you don't cut prices. it's not like you have a chanel bag and if you wait long enough, the company will cut the prices. >> we don't cut prices, but we have total vertical migration which allows us to control everything we do. we control the whole chain and offer the product at a very competitive price. >> you don't think woody allen was purposely trying to slight your brand? >> no, no, it just fit the story and what's happening to this poor woman, obviously, and as i said, i don't think it was any -- >> so, tell me about the valuations. what holds their value most in
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terms of -- you've seen so much and i love the idea that you are there from the mining of the stone, the jewel all the way to the retail experience. >> well, the final is the quality, the better the growth in value, so when you buy diamond, you're better off buying a smaller stone of really fine quality versus a bigger stone of poor quality. there is another exception, which are the colored diamonds. the blue, the pink. those are extremely rare. the value of those is growing. >> have you seen a jewel, it lose value in the last 25 years? >> in the past 35 years, the price of diamonds never went down. >> are you kidding me? >> at worse, stayed fratto flatt, but ner went down. >> how's business today? >> extremely good. >> tell me where it's coming from? we're in an anemic growth economy all around the world. >> business is coming from the
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bricks. >> still, the emerging markets. >> demand from asia, south american countries. eastern europe is absolutely unbelievable and it's really pushing up business and in america, don't discount america. 50% of the diamond jewelry sold in the world is still sold in the u.s. china and indonesia and india are growing up obviously very, very fast, but america is still the number one market. >> and these are americans buying or are you saying foreigners in america? >> it's a combination of both. in my new york store for example, it's 40% americans. 60% foreign. >> really interesting. have you seen that foreign component increase? >> tremendously. >> because people are coming to new york. >> tremendously. the amount of business we do with tourists and foreigners nowadays to 30 years ago when we opened the business is no comparison. >> and are you raising prices?
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>> we're following the market. so, yes, prices are going up. absolutely. as we, it's costing more at the production. it obviously follows the market. >> it's, what a business, henry. really -- >> it's a fun business. >> let me just end where i started. do you want an apology from woody allen? >> no, not at all. i enjoyed his movie very much. it's a great movie. >> and there you are. pleasure to have you. so nice to see you. >> it's a real pleasure. >> so, if you think the rally here in america has stalled, news today of where the next bull market may be. stay with us. that's next. to update our status without opening an app. to have all our messages in one place. to browse... and share... faster than ever. ♪ it's time to do everything better than before. the new blackberry q10. it's time.
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axiron. and finally today, the dow now more than 300 points off its all time high set this month. many blaming the dog days of august, low volume. traders hitting the beaches, so now, some are looking for gains in europe where things have lagged. the latest data shows the region is finally emerging from an 18-month recession. the german economy growing by seven tenth of a percent in the second quarter while france
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expanded by five tenths of percent. these are the largest economies in europe, so even though it's too early to say the renal is out of the woods, investors are trying to stay ahead of it. many wall street banks have been recommending european banks and they have seen a big bounce. the market there is have been better since mario draghi drew the line in the sand. up 13% year to date. the ft 100 in u.k. up 12%. the overall european stocks index showing gain of 8% year to date. the pe rh owe in this, about 12 times earnings. now, the gains trail s&p 500 and the dow of course, but investors are betting they are buying into a bargain. even though economic signs have been mixed with italy and spain most likely contracting, this is a valuation play, where
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multiyear stocks sell off and prolonged recession has muted the return for equities. as they say, there's always a bull market somewhere and as some say ours has stalled, europe is where smart money is betting. that will do it for today. we had a tough day today. we'll boo b here tomorrow. fs money begins right now. have a great night. i'm melissa lee, our traders tonight are -- let's get straight to the big story. retail wreck. consumer names dragging down the major averages. investors now have to brace for poor retail earnings tomorrow. so karen, you went in and used a weakness to buy more. >> yes, have a large position going in, which we did, but i really like macy's,


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